Here are 10 tips from the ByteStart team for anyone who is thinking about starting a new business in 2014.
1. Why are you starting up a business?
Setting up on your own is a big deal. To succeed in business requires a lot of commitment, and patience. You will need to be able to structure your time, and keep on top of your paperwork.
The potential rewards can be great, however running a business will not suit everyone, so you should be honest with yourself and consider whether or not you have what it takes to go it alone.
2. Evaluate the different business structures
One of the first tasks will be to decide which business structure to trade under – sole trader, partnership, limited liability company, or LLP.
The tax and legal obligations as owner of each structure varies. You can read more about the specifics of each option in our guide to business structures.
3. Identify your skills
You should identify your key skills, and honestly work out what your weaknesses are. Don’t be afraid to ask your family or friends for their opinions.
The most successful business people know their weaknesses as well as their strengths, and are prepared to seek outside help where they need it.
4. Think about the funding you will need
One of the main reasons why businesses fail is because they run out of money. Be conservative when working out how much funding your new business will require, and keep on top of your cashflow management.
You can read about all the available funding options in our dedicated Business Finance section.
5. Analyse the marketplace
Make sure that there is a market for your product or service. Just as Texaco wouldn’t build a petrol station next door to two others, a start up business should ensure that the market for buyers or users is strong in the area he intends to set up in.
6. Know the competition
Don’t underestimate your competition. Spend time researching how your competitors operate, identify any weaknesses they have, and don’t be complacent.
7. Have a business plan
Although many people don’t believe business plans are worth the paper they are written on, even if you don’t consult your plan in the future, the process of writing one can be immensely helpful in structuring your thoughts.
If you need to seek funding, or plan to involve a business partner, you will most likely need an up-to-date plan. Read our Business Plan Guides for further ideas.
8. Consider the staff you may need
As your business expands, you may well need to hire people to manage certain aspects of your operation. You need to ensure they have the right skills for the job. Above all, you need to be able to “click” with the people you work with – this simply cannot be underestimated.
9. Seek professional advice
Many business owners say that their accountant is the most important adviser they could ever have. The services of a professional adviser can be invaluable and can make the difference between success and failure.
10. Biggest causes of failure
Most businesses fail for one of two reasons (or both) – not researching their market thoroughly, and not keeping on top of their cashflow. Keep an eye on these two issues in particular!
More help on starting a business
You’ll find plenty of useful advice on ByteStart to help you plan and launch a new business, and the following are essential reading for anybody thinking of going it alone;
- 5 things you must do when you go self employed
- Which business structure should you choose for your new business – sole trader, limited company, partnership or LLP?
- What insurance policies is your business legally required to take out?
- The secrets of getting a business bank loan
- How to attract more customers by developing a strong USP for your business
For more ideas, why not try our complete guide to starting a new business.